U.S. economy stalls in Q1, growing at a 0.1% annual rate

The Commerce Department reported this morning that the U.S. economy grew at a 0.1 percent annual rate in the first quarter of the year – a sharp turnaround from the 2.6 percent growth in the gross domestic product expansion seen in Q4 of 2013.

Economists had predicted slower growth of around 1.2 percent due to weather factors, but this report may raise fears that the U.S. could fall back into recession.

The winter in the U.S. – especially in the Midwest and East – was exceptionally hard this year, and observers place much of the blame for the lack of growth on that. Much of the declines seen in the report are the result of declining inventory growth. Businesses accumulated $87.4 billion in inventory in Q1, the smallest amount since Q2 of 2013.